A Tax Policy With San Francisco Roots

Henry George, the 19th-century political economist, spent his seminal years in San Francisco. He is no longer a household name, and his “land-value taxation” theory is probably among the few radical ideas for government financial reform that haven’t gotten a hearing in Washington in recent weeks.

But his ideas, in their way, are remarkably relevant now.

George proposed a simple taxation system in which land, but not the value of any buildings or improvements, would be taxed at a rate so high that it would satisfy all of government’s revenue needs. No complicated income tax code. No dog’s breakfast of special fees and gimmicks to balance government budgets. Just a confiscatory tax on land. “Georgism,” as its single-tax principle is known, would be devastating for real estate speculators and large landowners, but proponents say it would be painless for most everyone else.

Here in California, a state that has bled itself dry by radically reducing property taxes, it’s easy to forget that just a few decades ago Georgism had an avid following. None less than Willie L. Brown Jr., the former San Francisco mayor and State Assembly speaker, championed Georgist policies, sometimes with the support of John Burton, the longtime Democratic power broker.

Mr. Brown twice introduced state legislation to create a Georgist land-tax regime. “I was badly defeated with that legislation both times,” he wrote a fellow Georgist in 1973. “But I am still convinced that land-value taxation should be given a try.”

A few years later, voters opted instead to slash property taxes via Proposition 13. Mr. Brown moved on, first to an enormously successful (and centrist) political career, and then to his current gig as a high-powered lawyer who counts major real estate developers and corporate landowners among his clients.

But Mr. Brown was certainly in good company as a Georgist. Devotees over the years have included Leo Tolstoy, Winston Churchill, Sun Yat-Sen, and the inventor of the board game that would become Monopoly.

“Henry George was called the Prophet of San Francisco,” said Joshua Vincent, a Georgist and the executive director of the Center for the Study of Economics in Philadelphia. “He led a mass movement, a pre-socialist labor movement.”

George later moved to New York City and was a candidate for mayor when he died of a stroke four days before the 1897 election.

It’s easy to see why George’s theories and his most-famous book, “Progress and Poverty,” published in 1879, appealed to the young Mr. Brown. The grandson of slaves, Mr. Brown grew up poor in segregated Mineola, Tex., and came to San Francisco in 1951 as a teenager with little education and less money. He is an entirely self-made man.

“Willie Brown was one of the few who had the courage to speak up for this reform and actually introduce land-value tax legislation,” said Cathy Orloff, who in the 1970s ran the Henry George School in San Francisco, which offered classes in Georgism to hundreds of students. “People in the school greatly admired him for that.”

Mr. Brown did not respond to inquiries about his Georgist past, and he’s clearly not preparing to take up the flag again.

But Joseph E. Stiglitz, the Nobel Prize-winning Columbia University economist, is stepping into the breach. In December, Mr. Stiglitz called for the adoption of “Henry George Principles” as part of his prescription to resuscitate the American economy. “Land does not disappear when it is taxed,” Mr. Stiglitz wrote in “Principles and Guidelines for Deficit Reduction,” a working paper for the progressive Roosevelt Institute. “Henry George, a great progressive of the late nineteenth century, argued, partly on this basis, for a land tax.”

Would California have fared better if Mr. Brown’s Georgist land-value tax had won widespread adoption? It’s almost impossible to contemplate, given how the economic structure of the state has been determined by private land development. Instituting land-value taxation in one fell swoop would cause the value of real estate to plummet, an outcome few would applaud.

But governments at every level are being forced to get creative as they seek new ways to finance basic public services, and if anything good is to come of the current catfight in Washington, it may be a renewed openness to all manner of budget-cutting, tax-reforming ideas.